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Reports of New Mechanisms Feasibility Studies: FY2011

Title of Feasibility Study (FS)New Mechanism Feasibility Study for Renewable Energy Development Focusing on Geothermal Power Generation in Colombia
FYFY 2011
Main Implementing EntityMitsubishi Research Institute, Inc.
FS PartnersISAGEN S.A.E.S.P., Numark Associates
Location of Project ActivityColombia
Category of Project ActivityRenewable Energy
Summary of FS ReportPDF (1.0MB)
Description of Project/ ActivityThis project is Colombia’s first geothermal power project, and is planned for the Nevado del Ruiz area. The facility scale is 50 MW capacity. Hydropower makes up the majority of the country’s energy mix; during El Nino periods, owing to droughts, there is a risk of the electricity supply becoming unstable. Introduction of geothermal, with its stable supply even in El Nino periods and limited GHG emissions, is expected. Japanese manufactures have a competitive advantage in the geothermal market.
Viewing the project electricity generation as otherwise coming from the grid, the emission reduction amount is calculated.
Reference Scenario and Project/ Activity BoundaryIn concrete terms, in the case of a country with an insufficient electric power supply (even allowing for latent demand), where the nation-wide capacity of hydropower - which is affected by weather - is greater than or equal to 50% of total capacity of all power sources, then it was proposed that a method be established with reference to the “Tool to calculate the emission factor for an electricity system” where individual power station data exists, and with reference to the “Guidelines for the establishment of sector specific standardized baseline” whereby such data does not exist.
Energy sources seen as contributing to the stabilization of the power supply in Colombia are natural gas and diesel (off-grid) in the short term and coal in the intermediate term. These energy sources are assessed with the same quality levels as the project in order to find out the extent to which they would fulfil the minimum service level.
The spatial extent of the project boundary includes the project power plant and all power plants connected physically to the electricity system or grid that the project power plant is connected to. In addition, it includes any off-grid plants that are replaced by the project as per the established reference scenario.
Monitoring Methods and PlanMonitoring of the quantity of electrical power generation and steam are carried out under normal operating conditions. Non-condensable gases (CO2 and CO4) contained in the produced steam are considered using established default values for CO2 and CO4,in order to decrease the added burden on operators. However, as a consequence, it is exceedingly difficult to set an applicable default value that would be uniformly employable across all projects because of a great deal of variation in the mass fraction in steam.
Among monitoring methods, the ASTM standard is used as if it were the de facto standard of a sampling method. However, it requires more work than the method applied in Japan. Thus, it is preferable for the BOCM to choose methods which do not impose additional burdens on operators and to establish its own standard of monitoring. Since any monitoring method requires sufficient experience and know-how, capacity building in cooperation with Japanese companies is important for a developing country where geothermal power is newly introduced.
GHG Emissions and Reductions231,625 t-CO2
(In the case of utilizing a fossil fuel CM)
MRV System for GHG ReductionsThe execution of MRV is relatively simple for projects in the electricity sector. That is because data that is used for the calculation of emissions reductions can be measured within the power plant and because standard operating procedures commonly require the plant to measure, report and verify parameters - for instance the quantity of electricity produced. Furthermore, it is because the methods used for measurement adhere to what are, to all intents and purposes, globally-established standards.
With regard to grid emissions factors, the optimum situation is one in which the project proponent is able to tangibly utilize actual emissions factors calculated and released by the government which itself collects data from the individual power plants.
Looking toward the future, it is hoped that with the necessary support from Japan, third parties in developing countries will not only be able to implement Measurement and Reporting, but also carry out the required Verification step in the MRV process.
Analysis of Environmental, Socioeconomic and other Impacts (including Securement of Environmental Integrity)As harmful effects that accompany geothermal development from an environmental standpoint, the following among others are cited: noise pollution, ground subsidence, residual heat effects, release of airborne pollutants. These harmful effects are proportional to the scale of use (i.e. the scale of the facility introduced); especially for large facilities avoidance measures must be carefully considered.
A license has already been acquired for test well drilling.
This appears to be progressing while making reference to the mining development division’s environmental impact assessment; it is surmised that in reality project development is taking place simultaneous with the government’s legal preparations.
Financial PlanningThe outline and financial plan of this project are shown below. At this time the Phase 2 technical evaluation has ended, and the selection of winzes in the test well drilling of Phase 3 is ongoing. Regarding construction financing, at this time lenders are being considered. It is expected that JBIC will also be a possibility.
Introduction of Japanese TechnologyThere is a good chance that Japanese technology will be introduced as it is a global market leader in delivering geothermal energy solutions.
(i.e. Improvement of Local Environmental Problems)
It is expected that the introduction of a geothermal plant could serve to reduce air pollutants. Due to the lack of available data, calculating co-benefits are based only on SOx. Quantified co-benefits are 8,940 t/year.
Contribution to Sustainable Development in Host CountryThe project would contribute to the country’s sustainable development by stabilizing electricity supply, and assisting with climate change countermeasures and capacity building for geothermal resource development.

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